Nokia sale is a good deal for both parties

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Photos:Nokia through the ages

Nokia through the ages – As Microsoft sets out to buy Nokia, CNN takes a look through some of the Finnish mobile giant's unique designs. Pictured here is the Nokia Mobira Cityman, announced in 1989.

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Photos:Nokia through the ages

Nokia through the ages – Nokia 1011, announced in 1992. Nokia isn't the first phone company to be bought by Microsoft. It bought Danger in 2008, which it then used to launch the Microsoft Kin phone.

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Nokia through the ages – Nokia 2110, from 1994. Nokia, which was the number one seller of mobile phones globally in 2007, had a tough few years before the stewardship of Stephen Elop slowly started to turn it around.

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Photos:Nokia through the ages

Nokia through the ages – Nokia 8110, announced in 1998. Since its rebirth, Nokia has over taken BlackBerry in around 34 markets, according to the company.

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Nokia through the ages – Nokia 3650, introduced in 2003. Analysts say the deal will likely benefit Microsoft in the same way that creating and making smartphones has for Apple.

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Photos:Nokia through the ages

Nokia through the ages – Nokia 9110i Communicator, released in 2000. As retailers throughout the last century showed, if you make and sell your own products, the margins can be higher, and the profits better.

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Photos:Nokia through the ages

Nokia through the ages – Nokia 6630, announced 2004. As the world's austerity drive continues, Microsoft will be able to reap rewards once it owns Nokia outright.

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Nokia through the ages – Nokia 7280, released in 2004. Not much is likely to change in the short term, but Nokia will more than likely move into the tablet arena a lot quicker, say analysts.

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Nokia through the ages – Nokia 7260, from 2004. Microsoft's Surface tablet is likely to be rebranded or ditched completely, in favor of something more Nokia-flavored.

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Nokia through the ages – Nokia 5500, announced in 2006. Microsoft will license the Nokia name for the next 10 years.

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Nokia through the ages – Nokia N93, from 2006. Microsoft's CEO Steve Ballmer has announced that he'll be stepping down over the next year. Will Stephen Elop, the former Nokia CEO, one day replace him?

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Nokia through the ages – Nokia 95, from 2006. Elop stepped down as Nokia's CEO on Monday to become the head of the company's devices and services business. He will continue leading Nokia's phones business as the devices chief at Microsoft.

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Nokia through the ages – Nokia 5700 Sport Music Edition, released in 2007.

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Nokia through the ages – Nokia N97, announced in 2009. By buying Nokia, Microsoft's ambition to become a hardware company is well and truly realized.

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Nokia through the ages – Nokia Lumia 1020, announced in 2013. The Lumia range, which now includes half a dozen handsets, is still a minnow in the smartphone world in terms of market share, but it is slowly gaining traction.

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Story highlights

Nokia had a tough few years before Elop slowly started to turn it around, says Stuart Miles

Deal will benefit Microsoft the same way that making smartphones has for Apple, he says

Not much will change in the short term, but Surface tablet "likely to be rebranded or ditched"

Microsoft's ambition to become hardware company is well and truly realized, Miles says

It's the deal that's been rumored since Stephen Elop joined Nokia from Microsoft three years ago, and now it's become reality. Microsoft is to buy Nokia, and become a phone manufacturer ... for the second time.

That's right, Nokia isn't the first phone company to be bought by Microsoft. It bought Danger in 2008, which it then used to launch the Microsoft Kin phone. That effort lasted around nine months before the whole adventure got canned and the world moved on.

This time around promises to be different.

Nokia, which was the number one seller of mobile phones globally in 2007, had a tough few years before the stewardship of Elop slowly started to turn it around.

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The Lumia range, which now includes half-a-dozen handsets, is still a minnow in the smartphone world in terms of market share, but it is slowly gaining traction. More and more people are going Lumia.

Since its rebirth, Nokia has over taken BlackBerry in around 34 markets, according to the company, and things are looking up following the success, in relative terms, of its latest batch of Lumia handsets.

The race is far from won, but at least, unlike BlackBerry, it is heading in the right direction.

The deal will likely benefit Microsoft in the same way creating and making smartphones has for Apple. The Cupertino-based company has for the past six years been able to make phones, market them, and sell them in its own stores.

As retailers throughout the last century can show (Marks & Spencer, Sainsbury's and Dixons in the UK,) if you make and sell your own products, the margins can be higher, and the profits better.

As the world's austerity drive continues, every little bit helps, and Microsoft will be able to reap those rewards even more once it owns Nokia outright.

So what next for both parties? Well not much is likely to change in the short term, but Nokia will more than likely move into the tablet arena a lot quicker.

Likewise, Microsoft's Surface tablet is likely to be rebranded or ditched completely, in favor of something more Nokia-flavored. Microsoft will license the Nokia name for the next 10 years.

Then there is the former Nokia CEO, Elop. Microsoft's CEO Steve Ballmer has announced that he'll be stepping down over the next year, and Elop will surely have his sights firmly set on replacing him.

Elop stepped down as Nokia's CEO on Monday to become the head of the company's devices and services business. He will continue leading Nokia's phones business as the devices chief at Microsoft.

Whether you believe Nokia has done well or not, Elop has done a fantastic job at Nokia, and there's very little stopping him. Being a Microsoft employee will only help his cause.

Perhaps Steve Ballmer wasn't such a bad CEO after all, especially considering that the $7.2 billion price tag for Nokia is less than the $8.5 billion it paid for Skype. This deal has just as much, if not more potential.

But ultimately, by buying Nokia, Microsoft's ambition to become a hardware company is well and truly realized.